Globalization/deglobalization: lessons from liberal monetary orders

Area of Science:

• International Political Economy
• Global Economic Governance

Background:

• The current liberal international economy faces challenges from the COVID-19 pandemic.
• Two theories explain the survival of international orders: self-sustaining benefits versus leadership-driven stability.
• International monetary arrangements are central to liberal economies.

Purpose of the Study:

• To evaluate theoretical explanations for the survivability of liberal international economic orders.
• To analyze the role of leadership versus self-sustaining benefits in maintaining international monetary arrangements.
• To assess the impact of crises, such as the COVID-19 pandemic, on global economic order.

Main Methods:

• Historical analysis of international monetary arrangements.
• Examination of theoretical approaches to international order survivability.
• Case study of the COVID-19 pandemic's economic disruption.

Main Results:

• No prior liberal international monetary order has been self-sustaining.
• Liberal international monetary sub-orders require leadership for survival, not just cooperation.
• Leaders actively shape follower actions when it is beneficial for them.

Conclusions:

• International economic orders, particularly monetary ones, are not self-sustaining.
• Leadership is crucial for the stability and survival of liberal international economic orders.
• The COVID-19 pandemic highlights the ongoing need for leadership in managing global economic disruptions.